Nov. 20, 2024

A property owned by Sanford Health on Minnesota Avenue could present the chance to redevelop an area of central Sioux Falls.

The building at 22nd Street and Minnesota Avenue is on the market for sale along with adjacent property, including a parking lot.

“This could be the beginning of some midtown redevelopment (as it’s) between downtown and the interstate,” said Gregg Brown of NAI Sioux Falls, who has the 1.1-acre site listed for $1.67 million.

The property includes an almost 15,000-square-foot building that could be renovated, he said. It was built in 1949 as an insurance office.

“The inside shows really well,” Brown said. “It’s got a lot of charming features from 1949. You’ve got terrazzo flooring, operable windows, just some neat features you’re not going to get normally from a modern building, but it needs to be updated.”

Research into the building’s history revealed it was designed to have four more stories, he added.

“It’s a concrete box, it’s not stick-built, and it could be engineered to add more floors, which is pretty fascinating,” Brown said.

Alternatively, it could be torn down and the site cleared for redevelopment. A small additional office building off the back is beyond repair and needs to be demolished, Brown said. A parking lot presents other options for redevelopment.

“It’s on a lighted intersection, and it’s over an acre, and I think there’s a lot of opportunity to renovate the existing office building or build some multifamily on the parking lot with maybe a level or two of parking and garage and apartments above,” he said. “It just depends. Potentially, there’s a medical user that would want to be located there to be next to Sanford and Avera and be close to downtown.”

Sanford no longer is using the property because many of its employees who worked in the building have since moved out to the Good Samaritan Society National Campus on West 57th Street, said Kris Denevan, vice president, facilities and support services at Sanford Health in Sioux Falls.

“As we look to maximize the utilization of our facilities in Sioux Falls, it made sense to sell this property,” she said.

“Selling this property does not interfere with Sanford’s long-term strategy, and we feel this location could be an opportunity to better utilize and support the development along Minnesota Avenue by the city and other entrepreneurs.”

The city of Sioux Falls approved midtown mixed-use zoning for locations such as this in 2023.

A year ago, an investment group led by Dr. Jonah Luzier announced plans for a four-story retail and apartment project at nearby 23rd Street and Minnesota that would include underground parking.

The retail space, between 5,000 and 6,000 square feet, would be along Minnesota Avenue and accommodate one or two tenants.

The plan is for 30 studio, one- and two-bedroom apartments, with a shared lobby and fitness room.

“We’re still trying to make the numbers work,” Luzier said. “Rates didn’t help. Rates coming down hopefully make it a little more of a workable pro-forma, and I think building costs are at least stabilized, maybe trending down a little in the short term. We’re kind of in a holding pattern.”

The investment group would like to find a clinic to operate in part of the space and continues to envision a mixed-use building, he added.

“The concept is still the same. I just don’t want to build until it really fits the vision,” Luzier said. “I’d rather wait for the right time … rather than just fill the space.”